35th Edition Crops, Environment and Land-Use Research Programme Kildalton CROPS COSTS AND RETURNS 2013 Compiled by: Tim O Donovan, Crops Specialist and Jim O Mahony, Head of Crops - KT Department
Crop Margins Awareness of crop margins is vitally important since under the decoupled regime the Single Farm Payment (SFP) will be paid irrespective of what crop is grown. Moreover, it makes no sense to produce the crop at a loss. The bottom line is that the land must be maintained in good agricultural and environmental condition. Note: The margins shown here do not include the SFP. Prices of grain and fertilisers may vary considerably from those predicted under the present volatile market conditions. The margins given here should provide a useful guide to profits but land suitability, rotation, risk avoidance and convenience should also be considered. There is little difference in margins between spring and winter feed cereals. Bonuses for quality are important. In the case of malting barley the availability of contracts and fulfilment of contract requirements may limit the attainment of these margins. Stacking (consolidation) is a provision where Irish farmers can get their full Single Farm Payment without the need to farm all the land they farmed in the reference years 2000-2002. At least 50% of the allocated entitlements from the reference years must be farmed. Farmers can only stack if they dropped rented or leased land, afforested land since 2000 or lost land due to compulsory acquisition for public good (CPO). Stacking applies to all farming enterprises. As over 1 /2 of arable land farmed is on rented ground this provision has major implications for the price of rented land for tillage. Stacking is available in 2013. In future years the stacked grower may rent additional land (if profitable) without compromising his stacked (consolidated) entitlements. Conacre appraisal The following table will provide a transparent exposition for growers and land owners as to the value of conacre. 1 Entitlement Value 2 Gross Margin achievable 3 Land problems, fertility, ph, P, K, trace elements, weeds, scutch, wild oats, other grass weeds 4 available for rent + farming (1+2)-3 Costs Level of yield has a major influence on profitability. Decisions on input strategies must be tailored for individual fields and farms. Timeliness and attention to detail in carrying out all operations are vital to maintaining profitability in crop production. All costs (direct and fixed) need to be kept to a minimum, consistent with good husbandry practices. Fixed costs will need closer attention. In particular, investments in machinery and land/conacre will need thorough financial appraisal before a decision is taken. Labour efficiency must be scrutinised.
MATERIALS 826 666 661 528 528 632 524 Seed 91 107 104 98 98 101 101 Fertilisers 441 369 344 301 301 375 292 Herbicides 56 45 56 45 45 27 27 Fungicides 185 115 115 75 75 105 80 Insecticides 38 20 17 10 10 10 10 Growth Regulators 15 10 25 0 0 15 15 HIRE MACHINERY 452 433 414 395 395 414 414 Plough, Till, Sow & Roll 170 170 170 170 170 170 170 Spray 95 76 76 57 57 76 76 Fertiliser Spreading 57 57 38 38 38 38 38 Harvesting 130 130 130 130 130 130 130 MISCELLANEOUS 94 71 82 59 59 82 59 Interest (6%) 34 17 28 14 14 28 14 Transport ( 6/Tonne) 60 54 54 45 45 54 45 TOTAL VARIABLE COSTS 1371 1170 1157 982 982 1128 997 Break-even yield (grain only) 7.6 6.2 6.8 5.8 4.9 6.6 5.9 Cost per tonne @ target yields* 137 130 129 131 131 125 133 Net Price ( /Tonne) 180 190 170 170 200 170 170 AID (SFP) = NOT included 0 0 0 0 0 0 0 Straw ( /ha) 75 65 125 90 90 90 90 Tonnes/hectare 6.0-216 35-12 128 308-18 113 7.0-36 225 158 298 508 152 283 7.5 54 320 243 383 608 237 368 9.0 324 605 498 638 908 492 623 10.0 504 795 668 662 11.0 684 *Crop margins are underlined for the various crop target yields. Totals may not agree due to rounding-off. 1
EXPLANATORY NOTES Fixed or Overhead Costs per Hectare Scutch Control 17, Lime 17, Maintenance of Land and Fences, Car, Phone, ESB, professional fees and regular hired labour Total ( 150/ha). Fixed costs and land land rental should be subtracted from gross margin. Vat is excluded from input costs and outputs A. INPUT COSTS: CEREAL CROPS /ha Seed: 650 /t Blue Label W. Wheat - 140 kg/ha; W. Barley - 160 kg/ha; W + S Oats - 155 kg/ha S. Barley - 150 kg/ha; S. Wheat - 165 kg/ha Fertiliser: Total Fertiliser (kg/ha) Fertiliser Bags (No. of 50 kg bags/ha) N P K CAN + S Cmpnd* 50 % K /ha W. Wheat 210 37 110 12.8 7.4 1.4 441 W. Barley 160 37 75 9.1 7.4-344 W. Oats 145 37 130 8.0 7.4 2.2 375 S. Wheat 170 25 110 8.5 8.4 1.0 369 S. Barley 135 25 85 5.9 8.4-301 S. Oats 110 25 110 4.1 8.4 1.0 292 CAN + S 350/t; *S. Cereals 13-6-20 470/t; *W. Cereals 10-10-20 500/t; 50% K 450/t Herbicides: W. Wheat & W. Barley 56/ha; S Wheat & S Barley 45/ha; Oats 27/ha /ha Fungicides: Winter Wheat: T0:Chlorothalonil (CTL)+/- Morph 10 T1: Eyespot + B.S. + CTL Growth Stage (G.S.) 31-32 55 185 T2: Broad Spectrum (B.S.) + CTL. G.S. 37-39 70 T3: B.S. (incl. triazole) Growth Stage 55-60 50 Spring Wheat: T1: 1/2 rate (B.S. + Morph. + CTL) GS 30-32 25 T2: B.S. + CTL. Growth Stage 37-39 55 120 T3: B.S. (incl. triazole) Growth Stage 55-60 40 S. Barley: T1: Red rate(triazole + mildew); T2: Strob.+ triazole+ CTL = 80 Winter Barley: 3 Fungicides G.S. 30/31, 32-37, 49 = 115 W. Oats: B.S. + morph at T1+T2, B.S. + Strob at T3 = 105 S. Oats: Reduced Rates W. Oats = 80 Insecticides: Winter wheat; Slug Pellets ( 27/ha) + Aphicide ( 11/ha) Other Cereals: Aphicide ( 5-10/ha) + /- Leatherjackets ( 11/ha) Growth Regulators: W. Wheat, W & S Oats = 15 Spring Wheat = 10 Winter Barley = 25 Hire Plough ( 80/ha), Till, Sow & Roll ( 90/ha) = 170 Machinery: Spraying (@ 19/ha): W. Wheat: Weeds + Aphids, PGR, Fungicide x 3 = 95 S. Wheat: Weeds + Aphids, Fungicide x 3 = 57 W. Barley: Aphids + Weeds, Fungicide x 3 = 76 S. Barley: Weeds + Aphids, Fungicide x 2 = 57 W. Oats: Weeds Aphids, Fungicide x 3 = 76 Fertiliser Spreading (@ 19/ha) = 38/57 Harvesting ( 130/ha) = 130 Interest 6%: Seed + Fertiliser + 0.5 Sprays; Winter - 10 months; Spring - 6 months 2
2013 CEREAL CROP MARGINS Variable Costs excl. VAT ( /ac) WHEAT FEED BARLEY MALTING FEED OATS Feed Milling BARLEY Winter Spring Winter Spring Winter Spring MATERIALS 334 269 268 214 214 256 212 Seed 37 43 42 39 39 41 41 Fertilisers 178 149 139 122 122 152 118 Herbicides 23 18 23 18 18 11 11 Fungicides 75 47 47 30 30 42 32 Insecticides 15 8 7 4 4 4 4 Growth Regulators 6 4 10 0 0 6 6 HIRE MACHINERY 183 175 168 160 160 168 168 Plough, Till, Sow & Roll 69 69 69 69 69 69 69 Spray 38 31 31 23 23 31 31 Fertiliser Spreading 23 23 15 15 15 15 15 Harvesting 53 53 53 53 53 53 53 MISCELLANEOUS 38 29 33 24 24 33 24 Interest (6%) 14 7 11 6 6 11 6 Transport ( 6/Tonne) 24 22 22 18 18 22 18 TOTAL VARIABLE COSTS 555 474 468 397 397 456 404 Break-even yield (grain only) 3.1 2.5 2.8 2.3 2.0 2.7 2.4 Cost per tonne @ target yields* 137 130 129 131 131 125 133 Net Price ( /Tonne) 180 190 170 170 200 170 170 AID (SFP)=NOT included 0 0 0 0 0 0 0 Straw ( /ac) 30 26 51 36 36 36 36 Gross Margins ( /ac) (incl. straw) WHEAT FEED BARLEY MALTING FEED OATS Feed Milling BARLEY Tonnes/acre Winter Spring Winter Spring Winter Spring 2.4-93 9-10 47 119-12 41 2.8-21 85 58 115 199 56 109 3.0 15 123 92 149 239 90 143 3.6 123 237 194 251 359 192 245 4.0 195 313 262 260 4.5 285 *Crop margins are underlined for the various crop target yields. Totals may not agree due to rounding-off. 3
2013 NON CEREAL CROP MARGINS Variable Costs excl. VAT ( /acre) BEET Potatoes MAIZE PEAS BEANS OILSEED RAPE Maincrop Winter Spring MATERIALS 451 1040 311 202 202 269 165 Seed 57 421 77 74 74 32 32 Fertilisers 292 288 208 67 67 164 117 Herbicides 71 57 26 28 28 38 12 Fungicides 12 223 0 29 29 24 0 Insecticides 20 53 0 3 3 10 3 HIRE MACHINERY 269 972 246 163 159 197 187 Plough, Till and Sow 101 304 101 69 69 69 69 Roll 0 0 0 7 7 7 7 Spray 31 161 8 23 23 32 23 Fertiliser Spreading 15 15 15 8 8 15 15 Swathing/Dessication 0 16 0 0 0 20 20 Harvesting 121 476 121 57 53 53 53 MISCELLANEOUS 174 158 157 24 21 24 14 Interest (6%) 16 36 11 5 6 9 4 Transport ( 6/Tonne) 158 121 146 15 15 12 10 Bird Control 0 0 0 5 0 3 0 TOTAL VARIABLE COSTS 894 2170 713 390 382 490 366 Break-even yield 22.3 10.9 15.2 1.4 1.7 1.2 0.9 Net Price ( /Tonne) 40 200 47 270 230 400 400 AID (SFP)=NOT included 0 0 0 0 0 Gross Margins ( /acre) Tonnes/acre (Maize, beet & potatoes) Pulses/ OSR BEET Potatoes MAIZE PEAS BEANS OILSEED RAPE Maincrop Winter Spring 1.0 34 12 1.2 230-149 -10 114 14 1.6 630-55 42-14 150 274 16 2.0-254 1030 39 150 78 310 434 20 2.2-94 1830 227 204 124 390 24 2.4 66 415 258 170 26 2.6 146 509 312 216 28 226 Totals may not agree due to rounding-off. 4
GROWER S OWN CROP BUDGET Variable Costs excl. VAT ( /acre) WINTER WHEAT SPRING BARLEY Your Teagasc Your Teagasc Your Teagasc Figures Figures Figures Figures Figures Figures MATERIALS ( A=B+C+D+E+F+G) A 334 214 Seed B 37 39 Fertilisers C 178 122 Herbicides D 23 18 Fungicides E 75 30 Insecticides Growth Regulators F G 15 6 4 0 HIRE MACHINERY ( H=I+J+K+L) H 183 160 Plough, Till and Sow I 69 69 Spray J 38 23 Fertiliser Spreading K 23 15 Harvesting L 53 53 MISCELLANEOUS ( M=N+O) M 38 24 Interest (6%) N 14 6 Transport ( 6/Tonne) O 24 18 TOTAL VARIABLE COSTS (P=A+H+M) P 555 397 Tonnes to cover variable costs (Q=P/R) Q 3.1 2.3 ANOTHER CROP Net Price ( /Tonne) R 180 170 AID ( /Acre) S 0 0 Straw ( /Acre) T 30 36 Projected yield U 4.0 3.0 (V = (R*U)+S+T-P) V 203 149 Gross Margins ( /Acre) An excel version of this calculator is available (free) from www.teagasc.ie/crops Totals may not agree due to rounding-off. 5
Share Farming Crop Budget Variable Costs excl. VAT ( /Acre) Crop Budget ( /ac) = Landowner Share ( /ac) + Sharefarmer Share ( /ac) MATERIALS (A=B+C+D+E+F+G) Seed Fertilisers Herbicides Fungicides Insecticides Growth Regulators MACHINERY COSTS (H=I+J+K+L) Plough, Till and Sow Spray Fertiliser Spreading Harvesting MISCELLANEOUS COSTS (M=N+O) Interest Transport TOTAL VARIABLE COSTS (P=A+H+M) Tonnes to cover variable costs (Q=P/R) A B C D E F G H I J K L M N O P Q Net Price ( /Tonne) AID ( /Acre) REPS /Acre) Straw ( /Acre) Projected yield R S T U V Gross Margins ( /Acre) (W = (R*V)+S+T+U-P) W = + 6
2013 NON CEREAL CROP MARGINS Variable Costs excl. VAT ( /hectare) BEET Potatoes MAIZE PEAS Beans OILSEED RAPE Maincrop Winter Spring MATERIALS 1116 2571 769 500 500 666 407 Seed 140 1040 190 184 184 80 80 Fertilisers 721 711 514 167 167 406 289 Herbicides 175 140 65 70 70 95 30 Fungicides 30 550 0 72 72 60 0 Insecticides 50 130 0 7 7 25 8 HIRE MACHINERY 664 2402 607 404 394 486 463 Plough, Till and Sow 250 750 250 170 170 170 170 Roll 0 0 0 18 18 18 18 Spray 76 399 19 57 57 80 57 Fertiliser Spreading 38 38 38 19 19 38 38 Swathing/Dessication 0 40 0 0 0 50 50 Harvesting(grading into store 300 1175 300 140 130 130 130 MISCELLANEOUS 429 390 387 60 51 60 34 Interest (6%) 39 90 27 12 15 23 10 Transport ( 6/Tonne) 390 300 360 36 36 30 24 Bird Control 0 0 0 12 0 6 0 TOTAL VARIABLE COSTS 2209 5362 1762 964 944 1211 905 Break-even yield 55.2 26.8 37.5 3.6 4.1 3.0 2.3 Net Price ( /Tonne) 40 200 47 270 230 400 400 AID (SFP)=NOT included 0 0 0 0 0 0 0 Gross Margins ( /ha) BEET Potatoes MAIZE PEAS BEANS OILSEED RAPE Maincrop Winter Spring Tonnes/hectare 2.0-105 (Maize, beet & potatoes) 2.5 95 30 3.0 638-352 -11 295 35 4.0 1638-117 116-24 389 695 40 4.5-609 2638 118 251 91 589 895 50 5.0-209 4638 588 386 206 789 60 5.5 191 1058 521 321 65 6.0 391 1293 656 436 70 591 Totals may not agree due to rounding-off. 7
EXPLANATORY NOTES - NON CEREALS B. INPUT COSTS: NON CEREAL CROPS /ha Fertilisers/ha Beet: 1,235 kg Beet cmpnd @ 490 /t = 605 330 kg CAN + S @ 350 /t = 116 721 Maize: 620 kg 0-7-30 @ 450 /t = 279 670 kg CAN = 235 514 Beans/Peas: 370 kg 0-7-30 167 Winter OSR: 370 kg 10-10-20 @ 500 /t = 185 250 kg Urea @ 480 /t = 120 406 280 kg ASN @ 360 /t = 101 Spring OSR: 370 kg 13-6-20 @ 470 /t = 174 289 330 kg CAN+S @ 350 /t = 116 Interest 6%: Beet, Maize, WOSR & Potatoes = 7 Months; Beans = 6 Months; SOSR & Peas = 5 Months 2013 FORAGE CROP MARGINS Variable Costs excl. VAT ( /hectare) F. BEET SWEDES KALE RAPE STUBBLE MAIZE TURNIPS MATERIALS 1116 518 553 309 238 769 Seed 140 80 102 30 78 190 Fertilisers 721 273 391 279 160 514 Herbicides 175 105 60 0 0 65 Fungicides 30 35 0 0 0 0 Insecticides 50 25 0 0 0 0 HIRE MACHINERY 664 255 208 189 99 607 Seedbed Prep + sow 250 200 170 170 80 250 Spray 76 36 19 0 0 19 Fertiliser Spreading 38 19 19 19 19 38 Harvesting+COVERING 300 0 0 0 0 300 TOTAL VARIABLE COSTS 1780 773 761 498 337 1376 GREEN YIELD (Tonnes/hectare) Leaves(+roots) 124 74 37 42 25 55 DRY MATTER (Tonnes/hectare) UTILISED 13.0 5.2 6.0 3.5 2.5 12.5 COST ( /Tonne util DM) 137 149 127 142 135 110 Covering Maize with plastic mulch will cost an extra 300/ha but will improve quality and increase yield Forage crops should be also evaluated on net energy, protein content etc. to discern a more complete value Totals may not agree due to rounding-off. 8
COMMENT ON FORAGE CROP COSTS Grazed Grass is likely to continue to be the cheapest fodder at about 50/tonne DM utilised. It has the advantage of producing very good yields in most locations and of course is extremely convenient to produce and utilise. Grass Silage: First cut grass silage can be produced at reasonable costs - approximately 130/tonne DM utilised. Grass silage costs vary considerably depending on yields. Second and third cut silage are more expensive forms of fodder (circa 150/t). Moreover, the variability in yield and quality of second and third cut silage has forced many farmers to consider alternatives such as maize, whole crop wheat and fodder beet. Non Grass Silage: The cost per tonne dry matter utilised for maize is approximately 110 and whole crop wheat is 120. Fodder Beet roots are estimated to cost 137/tonne DM utilised. Production from Brassicas such as swedes, kale and stubble turnips will not match the main fodder crops and have a reasonable cost at around 130 per tonne of DM utilised. Recent trial work in Moorepark has achieved high kale yields from excellent husbandry. Maize produces a high yield of quality feed at lower costs than grass silage giving improved animal performance. It is convenient as sowing and harvesting are done by contractor. Feeding can be done with existing grass silage facilities. Moreover, there are no rotational constraints and it utilises slurry very efficiently. The convenience of growing, storing and feeding as well as animal performance are important considerations when deciding which fodder crop to grow. The opportunity cost of land needs to be taken into account when making comparisons of fodder and bought in feed. Thus a rental charge of 350/ha may be applied for a full year in the case of grazed grass but somewhat less in the case of grass silage and brassicas.
Share farming Share Farming is an agreement between two individuals (or two businesses) to jointly manage a farming operation. This legal agreement allows both the grower and the landowner to farm as separate legal entities but share in the risks and rewards of growing crops. As both individuals remain separate business entities, they can continue to claim the Single Farm Payment, REPS etc in their own name as normal. Key points: Share Farming is fully compliant with EU/DAFM schemes (incl. REPS) The agreement is not land rental or a Partnership agreement The output generated from the land are to reward the Landowner for the land, labour and inputs supplied Share farmer for labour, expertise and inputs supplied Both parties are separate business entities and must not open or operate joint accounts to run the farming operation All tillage growers and landowners who are currently involved in land rental should familiarise themselves with this agreement and assess whether it is a viable option for the future. A template of a Share Farm Agreement is available (www.teagasc.ie) and sets out how an example agreement can operate. Contact your local advisor for more details. Organic Tillage Organic tillage has been a profitable enterprise over the last number of years. A stockless tillage system can be practised; however a mixed stock and tillage organic system is most sustainable due to the availability of slurry and farmyard manure. There is a strong demand for organic cereals both for livestock and human consumption. The demand for organic cereals is expected to continue for the foreseeable future. The Organic Farming Scheme is a support payment that may be claimed by Organic farmers. In the five year scheme farmers will receive 212 per hectare per year up to 55ha during the two year in-conversion period. Crops sown over 12 months after initial conversion date are deemed to have in-conversion status. In-conversion crops can be worth almost as much as full symbol crops. Full symbol growers will receive 106 per ha per year. Direct payments for organic production are paid yearly, based on a five year plan. Growers can partially convert a holding and continue to farm the remaining conventionally subject to certain restrictions. Non REPS growers in stockless rotations can receive additional payments of 240 per hectare for the two years in conversion to build fertility. Additional capital grants for buildings, machinery and equipment at a 40% rate are also available. Output is lower than conventional units but prices for grain are higher. Further information on organic farming can be obtained from the Teagasc organic specialist advisers. January 2013 Transforming Ireland